ExxonMobil Corporation - Research Paper Example

Founded in 1882 under the Standard Oil, ExxonMobil Corporation is one of the oldest industrial corporations and the world’s largest publicly traded oil and gas company. What is evident to note is that while the merger of Exxon and Mobil came about in 1999, both organizations share a common ancestor: the Standard Oil Trust. The primary concern for the company is to explore for oil and gas, and offer products of the categories to consumers on six continents. Operations for the company come under three brand names: Exxon, Mobil and Esso (ExxonMobil, 2010). ExxonMobil’s presence in Europe dates back almost 120 years, allowing it to become one of the region’s largest suppliers of oil and gas, refiner of crude oil and leading petrochemical companies (ExxonMobil Europe, 2010). The upstream business is responsible for exploration, development and production of crude oil and natural gas, as well as committing to research and development for breakthroughs in energy technology. The downstream business handles the refinement of the crude oil for fuels and lubricants, as well as the manufacturing of blended lubricants. This side of the business is more visible to the general consumer, in the form of Esso and Mobil service stations that deliver the fuel and lubricant products. ExxonMobil Chemical remains one of the top chemical companies in the world, with its products touching some form of daily life in Europe in several ways; an example is the plastics and plastic films produced that are used in bicycle helmets, seat belts, medical supplies and many other items. The formation of the European Union (EU) brought about several changes for the corporate entities that operated in the region (Knight, 2006). While on one hand there was an amalgamation in the most of the member states for rules that had to be followed, especially in terms of adherence to policies, there was also the introduction of new corporate responsibilities and climate control regulations that had to be adhered to by all entities operating in the EU. Despite the dominance and history that it enjoyed, this meant a shift in the operational development of ExxonMobil to a company more in sync with the environmental strains that some of its products could be causing. One of the key elements that the new EU administration undertook to regulate was a clampdown on fossil fuels and carbon emissions (Vogel, 2003). While this meant a change on several fronts, there was a call for the large organizations involved in the manufacturing of this line of products to undertake changes to the development process and components, in light of abiding by the new requirements that were due to be enforced in most member states of the EU. A good example of this could be the European Union Energy Green Paper, which called for investment of almost 1 trillion Euros across a twenty year period in order to secure European energy supplies (Knight, 2006). The basis of this investment related to a decrease in reliance on imported fuel resources while meeting the growing demand. The key factor, however, was adopting ways of restraining the growth of greenhouse gas emissions; this meant undertaking research in developing new fuels or innovating the current array of products to be more in line with the EU legislation. For ExxonMobil, Europe was a substantial market, and hence, it invested thirteen billion dollars between 2003 and 2007 in exploration activities within the region, as part of the efforts to harmonize with the EU requirements. In terms of energy efficiency, ExxonMobil came up with a process called cogeneration, which was deployed across its chemical plants and refineries in the EU (Skjaerseth, 2005). The process was a shift in strategy for the company to become more environmentally conscious, while reducing the wastes that were expelled into the atmosphere during its production processes. In cogeneration, the waste heat that is produced during electricity generation is collected, and then used elsewhere. This efficient use of the energy not only allows the company to save on utilizing more resources for a single task, but also helps in reducing the greenhouse gas emissions. The other shift in strategy related to understanding the underlying factor that was key to meeting energy needs, while having lower greenhouse gas emission; technology. ExxonMobil believes in the view that advancement in technology in vital to the company delivering long-term results that show effective harmonization with the EU’s climate initiative (ExxonMobil Europe, 2010). One project undertaken is collaboration with various research institutions and universities in the EU to develop new leads to viable technologies, which have the capacity to meet the energy demands while producing lower gas emissions to the current products. The second project involves the introduction of a process called Carbon Capture and Storage (CCS). It is a key implementation in the oil and gas operations of the company, where technical expertise is used to sequester carbon dioxide gas from release into the atmosphere. On the consumer front, the impact of gas emissions remains a strongly debated topic in the EU, and in order to harmonize its offerings and operations with the regulations, ExxonMobil underwent a stringent review of its products to ensure that they are produced to the highest of quality in order to play a positive role for the reduction of gases harmful to the environment (Schultz & Williamson, 2005). The introduction of bio-fuels that contain ethanol or similar additives was one initiative that ExxonMobil invested in. The fuel is researched to release less greenhouse gases, especially when compared to those that have lead as an ingredient. While it is hard to term it as clean fuel, since it does produce a small amount of emission, it is regarded as better than the average fuel available in the market. Also, ExxonMobil has embarked on research and development in renewable sources of energy, like solar and wind. This is in line with the EU’s legislation that is encouraging the investment and development of such sources, especially in terms of electricity production and other energy needs. The strategy adopted by ExxonMobil in the last decade has been to invest heavily in the research of future technologies, with the company claiming to have set aside billions of Euros for various research projects (ExxonMobil, 2010). However, as an old active player within the region, ExxonMobil has not relied solely on the production of products or research as means of complying with legislation, or establishing itself as a respected and trusted organization in the EU. Instead, it has undertaken initiative in educating the consumers and initiating awareness campaigns across communities, as part of a strategy to combat the greenhouse gases that are produced in the region. Some of the projects developed include energy efficiency drives to understand the environment and the best way acting more responsibly, as well as planting trees and improving the landscape (ExxonMobil Europe, 2010). Such involvement at the ground level of the community has helped ExxonMobil understand the mindset that exists among its consumer, while providing the audience a chance to witness change in corporate responsibility and help the organization implement a strategy that is linked to the harmonization of EU legislation. For ExxonMobil, the success of the strategy relies in part to its long history in the EU member states, as well as its resolve to play an active role in helping to ensure the environment it utilizes to make its products is kept as undamaged as possible. The future of this success in compliance is based on the development of more innovative fuels that can cater to the increasing energy needs of the states, while reducing or keeping constant the greenhouse gases released during the process. References ExxonMobil (2010) ExxonMobil, Available at http://www.exxonmobil.com/corporate/, Accessed on 04 April 2010 ExxonMobil Europe (2010) ExxonMobil Europe, Available at http://www.exxonmobileurope.com, Accessed on 04 April 2010 Knight, D. (2006) New EU regulation of chemicals: REACH, iSmithers Rapra Publishing, pp. 44 – 60 Rand, S. (ed) (2003) Significance of Tests for Petroleum Products, ASTM International, pp. 169 – 175 Schultz, K. & Williamson, P. (2005) ‘Gaining Competitive Advantage in a Carbon-constrained World: Strategies for European Business’, European Management Journal, Elsevier, Volume 23, Issue 4, pp. 383 – 391 Skjaerseth, J. (2005) ‘Major Oil Companies in Climate Policy: Strategies and Compliance’ in Hovi, J., Stokke, O. & Ulfstein, G. (eds) Implementing the Climate Regime: International Compliance, Earthscan, pp. 187 – 208 Skjaerseth, J. & Skodvin, T. (2001) ‘Climate Change and the Oil Industry: Common Problems, Different Strategies’, Global Environmental Politics, MIT Press, Volume 1, No. 4, pp. 43 – 64 Vogel, D. (2003) ‘The Hare and the Tortoise Revisited: the new Politics of Consumer and Environmental Regulation in Europe’, British Journal of Political Science, Cambridge University Press, Volume 33, pp. 557 – 580 Read More